FRA Co-Founder Gordon T. Long deliberates the Austrian School of Economics with Ty Andros of Tedbits Newsletter. Ty Andros began his commodity career in the early 1980's and became a managed futures specialist beginning in 1985.Mr. Andros attended the University of San Diego, and the University of Miami, majoring in Marketing, Economics and Business Administration. Mr. Andros is active in Economic analysis and brings this information and analysis to his clients on a regular basis.
What is Austrian Economics?
"Austrian economics is just human behavior, and common sense, and history."
"But what's happening is human behavior, nonsense, and history. We are at a period where people have forgotten history and are doomed to repeat it."
"Austrian school and capitalism are one in the same."
"Austrian Economics is production of wealth, producing more than you consume. Meeting people's needs and doing it in a superior manner; in other words, capitalism."
The historical school, had argued that economic science is incapable of generating universal principles and that scientific research should instead be focused on detailed historical examination. The school thought the English classical economists mistaken in believing in economic laws that transcended time and national boundaries.
Applying Austrianism to Investing
"You have to prey on paper."
"The only real way the middle class will get to success is going out serving others and getting rewarded for it."
"Austrian school is just history, common sense, and the production of wealth; everything else will flow from there. The reason middle classes cannot rise is somehow the public has gotten the idea that they are going to raise their lifestyle through the stroke of a pen at a central bank or other government bodies."
The Indirect Exchange
"In today's world economic growth is a function of a printing press; consumption presented as production."
It is a situation in which goods, services, etc. are traded between two countries using the currency of a third country. Real wealth can only be created by growing it, mining it, building it, manufacturing it; being rewarded for providing more goods and services for less to consumers. What we have now is phony capitalism, which is more money for less goods and services, while consumer demand is being mandated by government planning and controlled by central banking.
Events to Unfold in The Upcoming Years
"We are in a death event."
"If you date interest rates going back 600-600 years, we have never once had a scenario where they were kept at zero for 6 years. What we have is a flat line; just like in any medical monitor a flat line is fatal."
"The system is dead, we are just sitting there on the fumes and they can't relight it because they have outlawed free enterprise capitalism, and wealth creation. Look at the health care system right now, it is just a leviathan. They went in there and wrote Obama Care for themselves and that's how they became supporters. It was government sanctioned."
"Just look at Japan, we are headed right there."
"The long term the yield curve is going to invert, but it is going to invert near zero. There is no growth, the only growth there is, is just credit creation. To spurt credit creation they have to make it easier for people to borrow so people can miscalculate their returns."
Currency Extinction
"Currencies expire when people wake up, the value that currencies hold are only values within people's minds."
There is absolutely no value in them. As long as they are perceived as having real worth, you can purchase real things; this is the indirect exchange. Money is a store of value because it is not pegged to anything, as long as this allusion is there; we are substituting it to grab a hold of real cash flowing assets.
The Leverage Collapse
"The dollar is going down, and it is going to die; but it will be the last to die."
"They really have people thinking that the dollar is a risk free asset, and it is not. It is a worthless junk bond. Currencies don't float, they just sink at different rates, and the sinking is managed by the BIS and the ECB, Bank of England, Bank of Japan etc. and they all mange the theft of remaining value with their printing presses."
"The financial systems were given the keys to the castle. These economies are not run for the benefit of the entrepreneur; they are run for the benefit of the financiers. It is a game that the central banks have been playing since the 1600's when the Rothschild's went after the Bank of England. We are in troubling times and we need to be well informed. If you are an investor and you do it right, it will be the greatest time in history."
"A Depression is incoming and this one will be nasty, in fact it will be the worst one ever."
Abstract written by Karan Singh karan1.singh@ryerson.ca
